Simple Keynesian Model - Essay Example

The article reports that a report survey carried out by Rasmussen indicated that only 27% of the entire American population believe in the stimulation of the economy by the government. Over half of the Americans have a contrary view and claim that all the government intervention achieves is causing more damage than benefits, while six percent believe that it had no effect and 17% were found to be unsure (Fox, 2012).
In a contemporary era, whereby auto bailouts, maximum debt, and Dodd-Frank reform, interventions by the government, seem to be the Obama administration’s solution option, according to the article. The article claims that this stand has created a deep partisan gap between supporters and the opposition of the viewpoint. It highlights that the proposition is gains support mostly from democrats while most republicans and independents oppose the approach. It further explains that more divisions resulted due to class differences, as the wealthy class claimed that economic management by the government was helpful while the middle-class respondents believed that government control destroyed the economy (Fox, 2012).
The model states that the economy will be boosted when the government spends enormous sums of borrowed funds. Read More